7/22. The House began its consideration of
HR 2799,
the "Commerce, Justice, State, and the Judiciary Appropriations, 2004", the CJS bill.
The House is likely to pass the bill on Wednesday, July 23. The bill has become
a vehicle for addressing the
Federal Communications Commission's (FCC)
recently announced changes to its media ownership rules.

This
bill contains appropriations for most of the technology related executive branch
entities. See, story titled "House to Consider CJS Appropriation Bill" in
TLJ Daily E-Mail Alert No. 703, July 22, 2003, for a summary of the funding levels
of the various
technology related entities covered by the bill.

However, most of the debate on July 22 focused on policy, rather than funding
levels. Some of the policies debates pertain to rules of the FCC. The
House rejected an
amendment that would have limited
funding for the FCC to implement it recently
announced changes to its media ownership rules. However, backers of the FCC's
rules changes offered no amendment to remove the item that was added to the bill
by the House Appropriations
Committee
(HAC) that prohibits the use of funds to grant licenses for a commercial TV
broadcast station if the granting of that license would result in such party
having an aggregate national audience reach exceeding 35%. The House removed, on
points of order, two items in the bill that prohibit any FCC or
Federal Trade Commission (FTC) employees from
accepting payment of travel expenses from non federal entities to attend
conventions.

Media Ownership Rules. The HAC, which approved the CJS appropriations bill
on July 16, added an amendment that prohibits the use of funds
to grant licenses for a commercial TV broadcast station if the granting of that
license would result in such party having an aggregate national audience reach
exceeding 35%.

The bill provides, at Section 624, that "None of the funds in this Act may be
used to grant, transfer or assign a license for a commercial TV broadcast
station to any party (including all parties under common control) if the grant,
transfer or assignment of such license would result in such party or any of its
stockholders, partners, members, officers or directors, directly or indirectly,
owning, operating or controlling, or having a cognizable interest in TV stations
which have an aggregate national audience reach, as defined in 47 C.F.R.
73.3555, exceeding thirty-five (35) percent." (Parentheses in original.)

Opponents of this provision did not offer any amendments on the House floor
to remove it. Opponents could still seek to have the amendment removed by the
conference committee that reconciles the differences between the House and
Senate versions of the bill. Alternatively, President Bush could veto the bill.

However, Rep. Maurice Hinchey
(R-NY) offered an
amendment
that prohibits the use of funds to grant, transfer or assign certain broadcast
licenses, unless certain ownership conditions are met.

The amendment would have the effect of preventing
the FCC from fully implementing, during FY 2004, the newspaper broadcast cross
ownership and local TV multiple ownership rule
provisions of its
Report and Order and Notice of Proposed Rulemaking [257 pages in PDF]
amending its media ownership rules.

It failed by a vote of 174-254. See,
Roll Call No. 407. The vote correlated with party affiliation. 34
Republicans voted for the amendment, and 194 voted against. 139 Democrats voted
for the amendment, and 60 voted against.

Points of Order Regarding FCC & FTC Travel Expenses.Rep. Fred Upton (R-MI), the Chairman
of the House Commerce Committee's
Subcommittee on Telecommunications and the Internet, raised two points of order against two
provisions in the bill. First, he objected to the provision regarding travel
expenses of FCC Commissioners and employees on the grounds that it constitutes
legislation in an appropriations bill. The point of order was sustained.

It read, "Provided further, That, notwithstanding section 1353 of title 31,
United States Code, no Commissioner or employee of the Federal Communications Commission
may accept, nor may the Commission accept, payment or reimbursement from a non-Federal
entity for travel, subsistence, or related expenses for the purpose of enabling a
Commissioner or employee to attend and participate in a convention, conference, or
meeting when the entity offering payment or reimbursement is a person or corporation
subject to regulation by the Commission, or represents a person or corporation subject
to regulation by the Commission, unless the person or corporation is an organization
exempt from taxation pursuant to section 501(c)(3) of the Internal Revenue Code
of 1986."

Second, Rep. Upton raised a point of order against a similarly worded
restriction on Commissioners and employees of the FTC. That point of order was
also sustained.

Other Amendments. The House approved, by voice vote, an amendment
offered by Rep. Dave Weldon (R-FL) that prohibits funds from being used to issue
patents on claims directed to or encompassing a human organism.

The House considered an amendment offered by
Rep. Steve King (R-IA) to restrict
the use of funds from being used to engage in negotiations respecting a trade
agreement with another country which creates or expands a nonimmigrant visa
category authorizing the temporary entry of professionals into the U.S. He
withdrew the amendment.

He wrote regarding
HR 2799,
the "Commerce, Justice, State, and the Judiciary Appropriations, 2004". He
stated that "In reaching its conclusions on media ownership, the FCC conducted
an unprecedented and exhaustive review of its existing media ownership rules.
The review lasted 20 months and included 12 FCC commissioned studies of the U.S.
media market. This process led the FCC to update its rules to more accurately
reflect the realities of the modern media marketplace, with the enormous
proliferation of outlets for news and information. The Administration believes
that it is not in the public interest to limit the FCC's ability to implement
its new rules."

Bolten concluded that "If this amendment were contained in the final
legislation to the President, his senior advisors would recommend that he veto
the bill."

House Subcommittee Holds
Hearing on Classification of Broadband Services

7/21. The House Commerce
Committee's Subcommittee on Telecommunications and the Internet held
a hearing titled "The Regulatory Status of Broadband Services: Information
Services, Common Carriage, or Something in Between?" The
Federal Communications Commission (FCC) has
several open proceeding that pertain to the issue.

Positions of Senior Representatives.Rep. Fred Upton (R-MI), the Chairman
of the Subcommittee, stated at the outset of the hearing that "To the casual
observer of Title I versus Title II, and classifications of broadband as either
a telecommunications service, or an information service, may seem mind numbingly
arcane. However, the distinctions are critically important, and the FCC's
decisions in this regard may have a profound effect on our nation's consumers,
and our economy."

Upton (at right) stated that
"outmoded regulation is getting in the
way of investment in broadband deployment. The FCC needs to act now."

He advocated "deregulatory parity, not regulatory parity." He
added, "in my view, we ought to endeavor to provide the same deregulatory
treatment to all broadband services, regardless of the platform by which they
are delivered. We need to knock down regulatory barriers which are stifling
barriers to invest, if we are to bring the promise of broadband to the American
people, and realize the economic stimulus which it will create."

He explained that "old legacy telephone regs are simply not appropriate for
broadband services, particularly given that there are numerous technological
platforms by which broadband services are delivered. And, it makes not sense to
tie one hand behind the backs of the telephone companies seeking to provide the
same service as the cable companies, or for that matter, satellite TV companies,
wireless companies, or hopefully, in the not to distant future, powerline carrier
companies."

Rep. Ed Markey (D-MA), the ranking
Democrat on the Subcommittee, argued for parity, but based upon applying rules to
both telephone and cable companies providing broadband services. He
said the "distinction in nomenclature is important because the providers of
information services has differing legal and regulatory obligations than those
entities providing telecommunications services. Information services are largely
unregulated, as opposed to providers of telecommunications services. Providers
of information services do not currently have the universal service, consumer
privacy, law enforcement, interconnection, unbundling, or resale obligations
that telecommunications carriers have, just to name a few items."

Moreover, "By recently classifying broadband access to the internet over
cable systems as an interstate information service, the FCC took jurisdiction
away from state regulators, and local franchising authorities for such services,
offered by cable operators, and rendered cable modem broadband services
unregulated."

He added that "The telephone companies who compete with cable broadband
offerings in the residential marketplace with their DSL offerings correctly
point out that their service is comparable to that offered by cable operators",
and "the fact that the telephone companies seek equal treatment for cable modem
and DSL offerings is understandable. They should be treated the same way."

"However, not by deregulating the phone industry by redefining their services
so that they have minimal obligations, in the public interest, but to spur on
digital technologies and competition, the Congress enacted the
Telecommunications Act of 1996. That Act broke down historic barriers to
competition", said Rep. Markey. "Central to the Act was the notion that we would
treat entities based on the services that they were providing, rather than based
on their pedigree as a cable company, or phone company, or on the particular
type of facilities used to deliver the service."

However, he continued that the argument that the Congress "also meant to
obviate a phone company's or cable company's obligations to law enforcement,
interconnection, equal access, universal service, or consumer privacy, is
mistaken."

He concluded that "The latitude, however, that the Commission has afforded
itself to redefine the very services that we sought to promote in the
Telecommunications Act puts in jeopardy, not only many current provisions of
law, it also undermines our ability to legislate in the future, especially if
the words and terms we use to describe the rights and obligations of unregulated
entities may be subsequently swapped for others by regulatory fiat, and in
headlong pursuit of obtaining a level of deregulation that Congress did not
endorse."

Rep. Billy Tauzin (R-LA), the
Chairman of the full Committee, stated that "what we are talking about today is
an area of free speech, in a new form. And, every time we talk about the
capacity or the power of the federal government, and local governments, to
regulate the manner in which Americans speak to one another, in whatever new
form they find, I generally fall on the side of less regulation than more."

"It is governmentspeak as to whether or not this new digital world is really
information or telecommunications", said Tauzin.

However, he got technical too. He reviewed to the FCC's triennial review
order, and praised it for providing that "broadband facilities should not have
to be provided on an unbundled basis". He added that "the fact that they decided
these are not telecommunications services is a good start."

He also stated that "The underlying transmission component of broadband
services is also at stake here. And if you decide that that underlying
transmission is going to be subjected to the same sort of regulation by which
telephone traffic was formerly regulated, then I think we could get into some
deep trouble here."

Background on FCC Proceedings. There are many proceedings
at the FCC that relate to this hearing. Several open proceeding are most
important.

First, there is the FCC's cable modem service declaratory
ruling (DR) and notice of proposed rulemaking (NPRM). On March 14, 2002, the FCC
adopted a
Declaratory Ruling and Notice of Proposed Rulemaking [75 pages in PDF] that
addresses the legal classification and the appropriate regulatory
framework for broadband access to the Internet over cable system facilities. It
states that "we conclude that cable modem service, as it is currently offered,
is properly classified as an interstate information service, not as a cable
service, and that there is no separate offering of telecommunications service.
In addition, we initiate a rulemaking proceeding to determine the scope of the
Commission's jurisdiction to regulate cable modem service and whether (and, if
so, how) cable modem service should be regulated under the law ..."
(Parentheses in original.)

Second, there is the FCC's wireline broadband NPRM. On
February 14, 2002, the FCC adopted this
NPRM
[58 pages in PDF] that addresses the appropriate regulatory framework for
broadband access to the Internet over wireline
facilities.

This NPRM states that "we examine the appropriate classification for wireline
broadband Internet access service. As discussed more fully below, we tentatively
conclude that, as a matter of statutory interpretation, the provision of
wireline broadband Internet access service is an information service. In
addition, we tentatively conclude that when an entity provides wireline
broadband Internet access service over its own transmission facilities, this
service, too, is an information service under the Act. In addition, we
tentatively conclude that the transmission component of retail wireline
broadband Internet access service provided over an entity’s own facilities is
``telecommunications´´ and not a ``telecommunications service.´´ We seek comment
on these tentative conclusions and ask additional questions with regard to the
proper classification of wireline broadband Internet access service." This
is Docket 02-33.

See,
TLJ story
titled "So, Just What Are All of These FCC Broadband Proceedings About Anyway?",
December 12, 2002.

The order, among other things, provides that (1) there is no unbundling
requirement for fiber to the home (FTTH) loops, (2) there is no unbundling
requirement for a transmission path over hybrid loops utilizing the packet
switching capabilities of their DLC systems in remote terminals (however, ILECs
must still provide unbundled access to a voice grade equivalent channel and high
capacity loops utilizing TDM technology, such as DS1s and DS3s), (3) ILECs must continue to provide
unbundled access to copper loops and copper subloops, and (4) line sharing as an
unbundled network element is eliminated.

Positions of Witnesses. Tom Tauke, SVP for Government Relations at Verizon,
and a former member of the House, and its Commerce Committee, stated in his
prepared testimony that "We believe that the FCC took the first step in that direction
in the broadband sections of the Triennial Review order, limiting some of the
``old rules´´ to the ``old wires´´ of traditional telephony. And Verizon has reacted
in the marketplace to what it believes that order says. The FCC now needs to
finish the job and free the ``new wires´´ from the remaining ``old rules´´ by acting
promptly to establish a consistent national policy that does not interfere with
industry's deployment of broadband capabilities. If the Commission does that,
Verizon and, I believe, others will respond with greater investment in and
deployment of broadband."

"Verizon broadband today is primarily DSL services, which provide significant
improvements in data transmission speeds. But DSL is only a first step, with the
goal being fiber optic deployment into neighborhoods and homes. But as costly as
the job is of making DSL capabilities widely available, the task of rewiring the
country with fiber makes DSL deployment look like pocket change", said Tauke.

He argued that "we need a Triennial Review order on broadband that is
clear and that cannot be gamed. We need the FCC to finally declare that
Broadband technologies will not be subject to the unbundling rules that were
devised for a voice network." He also stated that "we need the FCC to finish
the job on broadband NOW. It
needs to classify our broadband services the same way it already has classified
comparable services provided by the dominant cable companies. The FCC should
first decide that all broadband services should not be regulated under Title II,
and instead should be classified under Title I of the Communications Act.
Broadband is not telephony, and it should not be regulated like telephony.
Imposing old telephony rules on broadband makes no sense."

In contrast,
Thomas Jones, an
attorney with the law firm of Willkie Farr &
Gallagher, testified on behalf of three competitive local exchange carriers (CLECs),
Allegiance Telecom, Conversent Communications, and Time Warner Telecom. He
stated in his
prepared testimony that "the FCC's proposal to reclassify the
transmission used in ILEC broadband Internet access as an unregulated Title I
service threatens Congress' established telecommunications policies".

He said that "by reclassifying these services out of Title II and
reversing decades of precedent, the FCC would eliminate the ILECs' obligation
to sell broadband loops to their CLEC competitors. For most small and
medium-sized business customers, the ILECs own the only broadband loops. No
other service provider, including cable, wireless or satellite, has deployed
ubiquitous business end user connections that have the upstream capacity,
reliability and security features of ILEC loops. The ILECs' market power over
business loops remains, regardless of what is sent over its loop facilities,
whether it be broadband or narrowband, or if the loop is old, new, borrowed or
blue. Therefore, the only way for CLECs to serve the business market is by
purchasing ILEC broadband loops. Eliminating their right to do so under Title
II, which mandates reasonable prices and service quality, will likely destroy
competition in this dynamic and innovative segment of the economy."

David Baker, VP for Law and Public Policy at Earthlink, a large ISP, stated
in his
prepared testimony that the effect of classifying all broadband services as
information services "would be far reaching because the common carrier
transmission services that are the foundation of the information economy would
no longer be required to be made available to information service providers upon
reasonable request on non-discriminatory terms and conditions. Network owners
would be free to arbitrarily decide who can use their networks, at what price,
and on what terms. This would not only work against consumer interests, but
vital communications links that can be reached today under court order by law
enforcement agencies would suddenly be beyond reach because laws like the
Communications Assistance to Law Enforcement Act (CALEA) would no longer apply.
Congress would have re-write an entire body of laws that have been carefully
enacted over the years to promote competition, protect consumers, and provide
for public safety."

He elaborated that all internet access services, whether provided by an ISP,
a phone company, or cable company, are information services. However, he
said that "all information services are, by definition, delivered via
telecommunications, and the offering of such telecommunications, whether by a telco or a cable company, for a fee to the public makes them telecommunications
services. This is true whether the Internet access is provided by an independent
ISP or by the network operators themselves. Internet access, broadband or
otherwise, is therefore an information service riding on top of a transmission
component which is a telecommunications service."

Baker criticized the FCC suggestion, which he summarized as "so long as the
facility owner refuses to offer consumers the option of buying the transmission
link separately from the information services component, the bundled package of
transmission and information service is an ``information service´´". He argued
that "As a result, facility operators are able to shield their transmission
networks from requirements for non-discriminatory access by other ISPs. This all
but eliminates competition among broadband Internet service providers and not
only violates the letter and intent of the Telecommunications Act, but also does
great harm to independent businesses and to consumers."

Nelson argued that the FCC's approach "is based on an obvious misreading of
text of the Act" and "is misguided as a matter of both the law and policy". He
stated that "As voice traffic continues to migrate to the broadband platform,
all of the consumer protections attendant to even the most basic common carrier
voice service will no longer automatically apply if the FCC declares that
broadband services are a ``deregulated information service´´ instead of a common
carrier service, as it is currently classified. The current common carrier
protections under Title II also include the assurance of fair and reliable
service at just and reasonable rates; the assurance of just and reasonable terms
and conditions of service such as billing and service termination practices; and
the assurance of compliance with basic service quality standards. The FCC’s
reclassification also undercuts additional goals that Congress established to
ensure that low-income customers who live in rural high-cost areas, and disabled
customers have reasonable and affordable access to the network."

In contrast, Davidson argued for a less regulatory approach. He stated that "The
broadband sector is characterized by fairly robust intermodal competition.
While cable modem service and DSL dominate the broadband market, overall take
rates for other technologies (e.g., fixed wireless, Wi-Fi, satellite) are
increasing. Of the competing technologies, DSL is potentially subject to
greater regulation than the others. Where there is technological parity
confronted with a regulatory disparity (i.e., where substitutable products are
subject to asymmetrical regulation), the predicted economic outcomes in the long
run include: a competitive advantage for the less burdened product; decreased
investment in the more burdened technology; and less consumer choice." He added
that "Technological parity should result in regulatory parity."

Unimpeded Connectivity. Paul Misener,
VP for Global Public Policy at Amazon.com,
testified on behalf of Amazon and the
Coalition of Broadband Users and Innovators.

His interest was not in the regulatory classification of broadband services.
Rather, he focused on "unimpeded connectivity". He stated in his
prepared testimony that "the defining characteristic of the Internet is
unimpeded connectivity.
Americans today may obtain online any lawful information, products, or services
available or sold on the Internet, without any discriminatory interference or
impairment by network operators." Misener wants the FCC to prohibit providers of
broadband consumer access from
imposing any impairments to unimpeded connectivity.

He explained that it is now technologically possible to impair connectivity,
there are incentives to do so, and broadband service providers have the market
power to do so.

"Broadband consumer access is completely digital and, thus, ... service
providers can impair connectivity in ways that
were virtually impossible in the narrowband, analog dial-up world. The most
obvious impairment is blocking access to certain information, products, and
services. ... Other likely impairments include the insertion of ``pop-up´´
advertisements or slower delivery rates based on a consumer's intended type or
source of information", said Misener.

He continued that "Broadband service providers, especially those that are
vertically integrated,
also have clear economic incentives to impair consumer access to certain
Internet-based information, products, and services. The economic incentive is
obvious when the service providers have collateral businesses in competition
with other Internet-based enterprises."

He also stated that "For the next several years, while broadband service
providers have market
power, competitive forces will not be able to check their technical
opportunities and economic incentives to impair consumer access to various
Internet-based information, products, and services. Put another way, absent
regulatory intervention, consumers will have no choice but to accept such
impairments until true competition emerges."

Next Subcommittee Hearing. Rep. Upton stated that "I hope that the FCC
is listening because I expect to have the Commission back, shortly after we
return in September. We will be asking them to explain, if they have not acted
by then."

He also stated that "In February, the Commission announced the results of it
Triennial Review. Five months later, the Commission still has not issued it
order. It seems that the Commission is moving at dial up speeds. Nevertheless, I
am cautiously optimistic that the Commission's order, once issued, will remove
significant regulatory shackles from the backs of the ILECs' broadband
facilities."

Rep. Upton asked the FCC's Robert Pepper whether the FCC will have
released its triennial review order by Labor Day. Pepper said only, "I hope so."

Notice

The TLJ Daily E-Mail Alert will not be published on Thursday, July 24, or
Friday, July 25.

Sen. Orrin Hatch (R-UT), the Chairman
of the Committee, wrote in his
opening statement that "Some have raised fairness concerns that WorldCom will
be able to emerge from
bankruptcy with much of the fruits of its widespread fraudulent conduct intact.
They argue that it will emerge from Chapter 11 with an enhanced market position
relative to its competitors, giving it not only a fresh start but a head start.
They believe that, in view of the WorldCom case, our bankruptcy system is set up
to make crime pay."

He added that "Others contend that the MCI which will emerge from bankruptcy is a new entity
with new leadership. They point to the extraordinary measures it has taken to
prevent the recurrence of past misdeeds. They further argue that MCI will not
have a meaningful competitive advantage from its Chapter 11 reorganization. And,
they argue that our bankruptcy laws appropriately are not designed to punish,
but rather to permit a company to reorganize and emerge from bankruptcy as a
viable entity."

Sen. Patrick Leahy (D-VT), the ranking
Democrat on the Committee, wrote in his
opening statement that "I understand that there are significant concerns
about the competitive
landscape as WorldCom emerges from bankruptcy. As a result of the bankruptcy
proceeding, WorldCom may have less debt than some of its competitors. Lowered
debt ratios are a serious concern and one that bankruptcy courts handle
frequently. If, as we move forward, there is some reason to believe the
bankruptcy system is breaking down, we are ready to step in and take appropriate
action.

William Barr, who was an Attorney General in the first Bush administration,
and is now EVP and General Counsel of Verizon,
lashed out. He wrote in his
prepared testimony that "The federal government’s response to date to
the massive fraud committed by
MCI is one of the most shameful episodes I have witnessed in Washington since
starting my career in public service more than 25 years ago. MCI committed the
largest securities fraud in American history, falsely manufacturing more than
$11 billion in income. Investors lost roughly $180 billion -- more than three times
the losses in Enron -- and MCI’s brazen scheme dramatically deepened the crisis of
confidence in corporate America, imposing incalculable costs across the whole
economy. In response, the federal government has taken several affirmative
steps -- not to punish MCI, or to strip away the gains from its fraud, or to ensure
that full restitution is paid to the tens of thousands of pensioners and
companies victimized by the fraud -- but to resuscitate the company from its
self-inflicted wounds by giving it a series of artificial advantages over law
abiding competitors."

In rebuttal, Nicholas Katzenbach, who was an Attorney General in the Johnson
administration, and is now a Director of MCI WorldCom, defended the actions of
the bankruptcy court. He wrote in his
prepared testimony that "I’d like to begin by asking those who would
inflict further pain on MCI: Who
is it, exactly, whom you intend to punish? Is it the 55,000 employees of MCI,
who have already seen their jobs put at risk and their retirement savings driven
toward oblivion? Or is it the creditors of the company, who have already seen
the value of their investment plummet? Or is it the victims of WorldCom’s fraud
who – because of our settlement with the SEC – now have a stake in the future
success of MCI? Or is it the nation’s long-distance telephone customers, who
would surely see their phone bills rise and see their service suffer if MCI were
to be driven out of business? Nothing that MCI’s opponents suggest would hurt
the already-departed and already-disgraced senior management of WorldCom, who
were ousted and replaced after the fraud was discovered. The draconian
punishment advocated by MCI’s opponents would, at best, be a futile gesture –
and, at worst, would inflict further pain on the innocent."

HR 2801 was introduced on July 21, 2003, by
Rep. Randy Forbes (R-VA),
Rep. Edolphus Towns
(D-NY) and others. It revises
HR 2183,
a bill by the same title introduced by Rep. Forbes on May 21. These bills are
companion to
S 196,
which was introduced by Sen. George Allen
(R-VA) on January 17, 2003. The Senate passed S 196 on April 30, 2003 by a vote
of 97-0.

These bills would authorize the appropriation of $250,000,000 for each of the
fiscal years 2004 through 2008 for grants to minority serving institutions ("a
historically Black college or university", "a Hispanic-serving institution", and
"a tribally controlled college or university") to acquire "networking
capability, hardware and software, digital network technology, wireless
technology, and infrastructure".

One significant difference between the bills is that HR 2801 would place the
newly created "Minority Serving Institution Digital and Wireless Technology
Opportunity Program" in the Department of Commerce's
(DOC) Technology Administration. HR 2183 and S 196 would place the program at
the
National Science Foundation (NSF). The change
would have consequences for the grant review process.

The Committee also adopted by voice vote an amendment offered by
Rep. Sherwood Boehlert (R-NY), the
Chairman of the Committee, that provides that the technology could be used to educate teachers in
science, math, engineering, and technology. The Committee also approved,
by voice vote, an amendment offered by Rep. E.B. Johnson (D-TX) that acknowledges
the achievements and contributions of
African American scientists, mathematicians, and inventors.

7/21. The Office of the U.S. Trade Representative
(USTR) released a
statement
[2 pages in PDF] regarding the provisions in the Chile and Singapore Free Trade
Agreements that allow the temporary entry of business professionals into the
other party to facilitate trade in services. It states that "Pursuant to the
agreements with Chile and Singapore, the movement of Chilean and Singaporean
professionals in the United States will be provided by the H-1B visa."

7/22. The House Homeland Security Committee
held a hearing titled "Putting the “R”
Back into “R&D”: The Importance of Research in Cybersecurity and What More Our
Country Needs to Do". See, prepared testimony of witness [in MS Word]:
Daniel Wolf
(Director for Information Assurance, National Security Agency),
Shankar Sastry
(Chair and Professor of Department, EE/CS, University
of California Berkeley), and
Steve Bellovin
(AT&T).

7/22. The House Judiciary
Committee and the House Homeland
Security Committee held a joint hearing titled "The Terrorist Threat
Integration Center (TTIC) and its Relationship with the Departments of Justice
and Homeland Security". See, prepared testimony of witness [in MS Word]:
John Brennan
(Director of the TTIC),
Larry Mefford
(Federal Bureau of Investigation),
Jerry Berman
(Center for Democracy and Technology),
William Parrish (Acting Assistant
Secretary for Information Analysis in the Information Analysis and
Infrastructure Protection Directorate).

Wednesday, July 23

The House will meet at 10:00 AM for legislative business. It may consider
HR 2739,
the "United States Singapore Free Trade Agreement Implementation Act",
HR 2738,
the "United States Chile Free Trade Agreement Implementation Act",
and/or HR 2799, the "Departments of Commerce, Justice, and State, the
Judiciary, and Related Agencies Appropriations Act for Fiscal Year 2004".
See, Republican Whip
Notice.

9:00 AM. Day one of a two day meeting to the
Bureau of Industry and Security's
(Bureau of Export Administration) Information Systems Technical Advisory
Committee. Part of the meeting will be closed to the public. The agenda
includes discussion of export controls on signal generators and arbitrary
waveform generators, discussion of developments in micro-processors technology
and export controls, discussion of proposal on encryption in network
management, election of a new chairman, and secret matters. See,
notice in the Federal Register, July 8, 2003, Vol. 68, No. 130, at Pages
40626 - 40627. Location: Room 3884, Hoover Building, 14th St. between
Pennsylvania Ave. and Constitution Ave., NW.

10:30 AM. The House Judiciary
Committee will meet to mark up several bills, including
HR 1417,
the "Copyright Royalty and Distribution Reform Act of 2003". The
meeting will be webcast. Press contact: Jeff Lungren or
Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

? 2:00 PM. The Senate Judiciary
Committee might hold a hearing on the nominations of Rene Acosta to
be an Assistant Attorney General in charge of the
Civil Rights Division,
and Daniel Bryant to be an Assistant Attorney General in charge of the
Office of Legal Policy. Press contact:
Margarita Tapia at 202 224-5225. This Committee frequently changes the time
and agenda of its meetings without notice. Location: Room 226, Dirksen Building.

The House will meet at 10:00 AM for legislative business. It may consider
HR 2739,
the "United States Singapore Free Trade Agreement Implementation Act",
HR 2738,
the "United States Chile Free Trade Agreement Implementation Act",
and/or HR 2799, the "Departments of Commerce, Justice, and State, the
Judiciary, and Related Agencies Appropriations Act for Fiscal Year 2004".
See, Republican Whip
Notice.

9:00 AM. Day two of a two day meeting to the
Bureau of Industry and Security's
(Bureau of Export Administration) Information Systems Technical Advisory
Committee. Part of the meeting will be closed to the public. The agenda
includes discussion of export controls on signal generators and arbitrary
waveform generators, discussion of developments in micro-processors technology
and export controls, discussion of proposal on encryption in network
management, election of a new chairman, and secret matters. See,
notice in the Federal Register, July 8, 2003, Vol. 68, No. 130, at Pages
40626 - 40627. Location: Room 3884, Hoover Building, 14th St. between
Pennsylvania Ave. and Constitution Ave., NW.

? 9:30 AM. The Senate Judiciary
Committee might hold an executive business meeting.
The agenda might include consideration of several bills,
and several judicial and Department of Justice (DOJ) nominations. The judicial
nominations are Steven Colloton (U.S. Court of Appeals for the Eighth Circuit), James
Browning (District of New Mexico), Brent McKnight (Western
District of North Carolina), David Proctor (Northern District of Alabama),
Kevin Castel (Southern District of New York), Sandra Feuerstein (Eastern
District of New York), Richard Holwell (Southern District of New York), and
Stephen Robinson (Southern District of New York). The DOJ nominations are Rene Acosta to
be an Assistant Attorney General in charge of the
Civil Rights Division,
and Daniel Bryant to be an Assistant Attorney General in charge of the
Office of Legal Policy. See,
notice. Press contact:
Margarita Tapia at 202 224-5225 or David Carle (Leahy) at 202 224-4242. This Committee
frequently changes the time
and agenda of its meetings without notice. Location: Room 226, Dirksen Building.

12:00 NOON - 3:00 PM. The Department of
Commerce (DOC) will hold a technology exhibition titled "Technology for
all Americans". At 2:00 PM, Phil
Bond, Under Secretary for Technology, will announce Secretary of Commerce
Donald Evans' new departmental initiatives to support the development of
assistive technologies. Location: main lobby, DOC, 14th and Constitution Ave.,
NW.

2:00 PM. The The House Judiciary
Committee will hold a hearing titled "Antitrust Enforcement Agencies: The
Antitrust Division of the Department of Justice and the Bureau of Competition
of the Federal Trade Commission". The hearing will be webcast. Press contact:
Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

Friday, July 25

The House will meet at 10:00 AM for legislative business. It may consider
HR 2739,
the "United States Singapore Free Trade Agreement Implementation Act",
HR 2738,
the "United States Chile Free Trade Agreement Implementation Act",
and/or HR 2799, the "Departments of Commerce, Justice, and State, the
Judiciary, and Related Agencies Appropriations Act for Fiscal Year 2004".
See, Republican Whip
Notice.

? 9:30 AM. The Senate Judiciary
Committee might hold an executive business meeting.
The agenda includes consideration of several
judicial nominations, including Henry Saad (U.S. Court of Appeals for
the 6th Circuit), Larry Alan Burns (Southern District of California), Glen
Conrad (Western District of Virginia), Henry Floyd (District of South
Carolina), Kim Gibson (Western District of Pennsylvania), Michael Mosman
(District of Oregon), and Dana Sabraw (Southern District of California)..
Press contact: Margarita Tapia at 202 224-5225 or David Carle (Leahy) at 202 224-4242.
This Committee frequently changes the time
and agenda of its meetings without notice. Location: Room 226, Dirksen Building.

Deadline to submit applications for loans or combination loans and grants
to the Rural Utilities Service (RUS)
under its FY2003 Distance Learning and Telemedicine Program. See,
notice in Federal Register, March 3, 2003, Vol. 68, No. 41, at Page 9973.

7/22. The California Court of Appeal issued its
opinion [MS Word] in
Kaufman v. ACS Systems, a case involving private causes of action filed in
state court under the Telephone Consumer Protection Act for unsolicited fax
messages. This case addresses only faxes. However, the Court's analysis may be relevant
to the current debate over how an e-mail spam bill should be drafted.

Barry Kaufman and David Amkraut are Californians who complain of unsolicited
fax messages sent by ACS Systems and Fax.com. They filed two separate complaints
in the Superior Court of Los Angeles County alleging violation of the Telephone
Consumer Protection Act of 1991 (TCPA), Public
Law No. 102‑243, which bans unsolicited faxes. They sought class action
status.

The Court "informally coordinated" the two actions. Both of the
junk faxers argued that
the plaintiffs have no private right of action under the TCPA, that if such a
right exists, it is unconstitutional, and that claims under the TCPA cannot be
brought as class actions.

The trial court ruled that the plaintiffs could not pursue a TCPA claim in
state court because the California Legislature had not enacted a statute
expressly permitting such a claim. The trial court also ruled that the TCPA is
constitutional and that TCPA claims may be brought as a class action.

This appeal followed. The Court of Appeal affirmed on the constitutional and
class action issues. It reversed on the remaining issue. A TCPA action may be
maintained in a state court because the California legislature has not
prohibited such suits.

The plaintiffs are Communications Patents and Intellectual Property
Development (IPD). Communications Patents is the assignee of
U.S. Patent No. 4,135,202 titled "Broadcasting systems with fibre optic
transmission lines". IPD is the exclusive licensee.

The defendants are UA-Columbia Cablevision of Westchester and
Tele-Communications, Inc. (TCI). They own and operate cable TV systems. Plaintiffs
filed a complaint in
U.S. District Court (SDNY) against defendants
alleging infringement of the '202 patent. The District Court granted summary
judgment of non‑infringement and invalidity.

The Court of Appeals affirmed the summary judgment as to non-infringement,
but reversed as to invalidity.

This is Intellectual Property Development, Inc. and Communications Patents,
Ltd. v. UA-Columbia Cablevision of Westchester, Inc. and Tele-Communications, Inc., No.
02-1248, an appeal from the U.S. District Court for the Southern District of New
York, Judge William Pauley presiding.

Starpower Communications, a
competitive local exchange carrier (CLEC) operating in the state of Virginia,
petitioned for review of a Federal Communications
Commission (FCC) order holding that two interconnection agreements between Starpower
and Verizon unambiguously do not require reciprocal compensation for telephone
traffic bound for an internet service provider (ISP).

The Appeals Court held that the agreements are not unambiguous. Rather, they
are "models of ambiguity". It granted Starpower's petition, and remanded to the
FCC for further proceedings.

This is Starpower Communications, Inc., petitioner v. FCC, respondent, and
Verizon, intervenor, No. 02-1131, a petition for review of a final order of the FCC.

OMB Comments on Draft E-Authentication
Policy

7/22. The Office of Management and Budget
(OMB) issued a release
regarding the draft policy titled "Draft E -- E-Authentication for Federal
Agencies". On July 11, 2003, the General Services
Administration's (GSA) Office of Electronic Government and Technology published a
notice in the Federal Register regarding electronic authentication. The
notice attaches, and requests comments on, the draft policy. The OMB supported
the GSA in writing the draft policy. Comments are due by August 11, 2003.

The OMB states that it is "is improving identity
validation and security online as well as reducing the time citizens wait to
access government services on the internet".

In addition, Mark Forman, Administrator of E-Gov and Information Technology
at OMB, states in the release that "The E-Authentication E-Gov initiative will
enable citizens to securely and easily engage government online. It helps
citizens and businesses have confidence in the protection of electronic
transactions with the federal government".

The Center for Democracy and Technology
(CDT) stated in its web site that "Authentication can involve everything from
passwords to biometrics. The issue of online authentication has many
implications for privacy and security. For example, it may affect whether
citizens can communicate with the government anonymously. It can also facilitate
linking of data from online interactions." See, CDT
web page titled "Identity,
Authentication & Digital Certificates".

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